Watson and Holmes left Lauriston Gardens around 1pm; Holmes mailed a telegram and the two men drove to the home of John Rance. Along the way Holmes explained to Watson how he had observed the multiple horses' hooves, the height of the murderer, and his age. He also offered the fact that he knew the writing on the wall was done with the man's forefinger dipped in blood, and the ash from the cigar was clearly a Trichinolopy brand because of the nature of the ash. The florid face was more of a gamble, but Holmes did not tell Watson why he believed that to be the case.
Watson summed up his confusion at the mysteriousness of the case- why the men were in an empty house?, what happened to their hansom driver?, what was the motive of the murderer?, why was there a wedding ring?, and what did the word RACHE mean?. Holmes approved of Watson's summation, and first answered that the word on the wall was merely a blind to mislead the police. He did not want to add much further, because "you know a conjurer gets no credit once he has explained his trick; and if I show you too much of my method of working, you will come to the conclusion that I am a very ordinary individual after all."
Watson rejoined that Holmes was responsible for bringing the act of detection as close to an exact science a he had ever seen, and Holmes smiled with pride at the flattering words. The driver stopped at Audley Court where John Rance lived; it was a sordid and unpleasing street.
The constable looked irritated at being interrupted from his sleep at first, but soon warmed to the two men when Holmes gave him a coin. The constable started from the beginning of the tale, explaining that he was on the late shift and it was very quiet except for a bar fight earlier. It began to rain and he stood with his fellow constable, Harry Murcher, for awhile on a corner. He then decided to look around Brixton Road and observed a light on in the empty house.
Holmes noted that he had walked up to the house and then walked back to the gate; this bit of information shocked the constable, who had no idea how Holmes knew that. Rance said he wanted to see if Murcher was around so he would not have to go into the house alone. The latter was not, so Rance went inside anyway. The house was empty and the candle was flickering on the mantle. Holmes continued to surprise Rance with his insertions of how exactly Rance traversed the room.
After Rance saw the body he went outside and sounded his whistle and Murcher and two others appeared. The only other thing he noted was a very drunk man stumbling about; he did not arrest him due to the dead body, a much more important manner. Holmes was curious about this drunken man and asked further questions. Rance said he had a red face and a long heavy overcoat. Holmes asked if he had a whip in his hand and Rance said no, upon which Holmes muttered that he must have dropped it.
As Holmes rose to leave he commented to Rance that he would never rise in the ranks of the force because he had no real powers of observation- "The man whom you held in your hands is the man who holds the key to this mystery, and whom we are seeking."
Watson and Holmes left, Holmes angrily muttering about how Rance was a fool and missed that piece of luck. Watson wondered aloud why the man would hang around the house where the murder was committed, and Holmes clarified that it was because he had come back for the ring. He then thanked Watson for encouraging him to follow up this "study in scarlet;" he deemed it such because "there's the scarlet thread of murder running through the colorless skein of life, and our duty is to unravel it, and isolate it, and expose every inch of it."
Clues to the identity of the murderer continue to fall into place in this chapter, and Watson is further enlightened about Holmes’ fantastic powers of observation and reasoning. He marvels at how Holmes deduced certain characteristics about the murderer's age and height. Holmes is clearly somewhat of a prideful man, as he puffs up with satisfaction when Watson lauds him for his ability to bring "detection as near an exact science as it ever will be brought in this world" (36).
One interesting element in this chapter is the allusion to Socialism and secret societies. Arthur Conan Doyle wrote several stories that satirized the fear of Socialism and anarchism; these include "An exciting Christmas Eve or, My Lectures on Dynamite" (1883), "That Little Square Box" (1881), and "A Night Among Nihilists" (1881). Doyle scholar Owen Dudley Edwards sees these works as mostly intended to be taken seriously, although the jocose tone of the tales made them much more satirical than sober. There had been a Socialists demonstration about unemployment in Trafalgar Square on February 8th, 1886 that resulted in broken windows and minor vandalism of wealthy shops and residences after its dispersal; the leaders were British and Irish citizens. This event was no doubt an impetus for the writing of the aforementioned stories and their resulting popularity.
One of the most memorable and perfectly-phrased lines in the novel concludes this chapter –"there's the scarlet thread of murder running through the colorless skein of life, and our duty is to unravel it, and isolate it, and expose every inch of it" (40). The title of this short novel was originally A Tangled Skein. The origins of Holmes’ utterance may derive from Song of Solomon 4:3, which says "thy lips are like a thread of scarlet, and thy speech is comely." The evocation of scarlet, as blood, is not only Romantic and compelling poetically, but is scientifically significant in that blood is now a way to identify aspects of the crime.
A final point to discuss is the relationship between Holmes and Watson. It has been pointed out multiple times in the literature that the two men occupy two different but complementary modes of operation- mind and body. Those two terms may be slightly lacking, but there is no denying that Holmes represents the apotheosis of the mind in his pure rationality and reasoning abilities, whereas Watson is an earthier, normal, and grounded individual. Watson exists to temper some of Holmes’ eccentricities and present his odd behavior and activities to the world through a slightly filtered lens. Watson is the interpreter of Holmes and is the everyman. While Watson is also smart and rational, he is not conspicuously unstable, arrogant, or weird.
Of course, while it is easy to see Holmes and Watson as being very different men who have a very successful relationship together because of their complementary traits, it is also quite possible that they are such a compelling and successful duo because together they represent one single personality. Holmes lives on the border between rationality and irrationality and crime and morality. He risks losing himself in this strange borderland. Watson thus is the other half of Holmes. According to scholar Frank McConnell, Holmes and Watson are this single personality; they are a "personality invented –one can almost say 'engineered' –to survive the social and intellectual travails of the middle class at the beginning of the 20th century."